Fox's Stirewalt: New rules force firms to deny Obamacare leads to downsizing

The Obama administration’s latest step to delay implementation of the Affordable Care Act gives employers more time to offer health insurance to their workers. The so-called employer mandate was suppose to kick in this year. About six months ago that was pushed back to 2015. As of this week, medium-sized companies, those with 50 to 99 employees, will now have until 2016.

The president’s critics responded quickly. "The White House seems to have a new exemption from its failed law for a different group every month," said Senate Minority Leader Mitch McConnell, R-Ky.

On Fox News, Chris Stirewalt speculated that a wrinkle in the newly announced rules was meant to silence companies that were just a little over the 99-worker mark -- and might be tempted to get under it.

"Firms will be required to certify to the IRS – under penalty of perjury – that Obamacare was not a motivating factor in their staffing decisions," Stirewalt said. "To avoid Obamacare costs you must swear that you are not trying to avoid Obamacare costs. You can duck the law, but only if you promise not to say so."

Stirewalt’s point was that this was designed to stifle public discussion about the health care law and jobs. That’s an uncheckable theory, but a reader on Facebook asked us if we could test the specific claim that firms must tell the IRS – under penalty of perjury – that they didn’t fire workers simply to avoid paying for their health insurance.

The worker clause

In the new rules released Feb. 12, a company qualifies for the year delay if it:

• Employed 50 to 99 full-time workers in 2014.

• Did not cut workers in order to get under the 99-worker bar. Cutting the workforce for bona fide business reasons is fine, including if sales dip or an employee isn’t up to snuff.

• Did not eliminate or "materially reduce" the health coverage it offered as of February 2014.

If a company meets those conditions, it has to tell the government, formally, under the rules of something called Section 6056. Jennifer Kraft, a lawyer who tracks the Affordable Care Act at the Seyfarth Shaw law firm, said some firms might find themselves navigating the nuances of these requirements.

"Employers would need to be mindful of whether there are other bona fide business reasons for making any workforce adjustments if they are trying to get the protection of this transition relief," Kraft said.

So Stirewalt is partially correct to say that companies can’t simply fire workers to gain an extra year before they need to offer health insurance. That’s not quite as broad as Stirewalt put it "to avoid Obamacare costs" but the rule certainly is part of Obamacare. Plus, a firm has to meet three conditions, not just the one Stirewalt mentioned, and report that to the government.

But the matter of the risk of perjury seems to rest on much shakier ground.

Featured Fact-check

Social Media

stated on December 6, 2024 in social media posts

UnitedHealthcare posted a job opening for a CEO 24 hours after its CEO was killed.

We asked Fox News and lawyers who focus on ACA law if they could point to the law that spells out the penalties for failing to comply under Section 6056. We heard nothing from Fox News and the two lawyers were uncertain.

Lisa Klinger, a benefits attorney with the Leavitt Group, a large insurance brokerage, guided us to an IRS proposed rule on 6056. A paragraph there said the reporting requirement would be "subject to the general reporting penalty provisions under sections 6721 (failure to file correct information returns), and 6722 (failure to furnish correct payee statement)."

We’re just concerned with reporting to the government so we looked at the law for 6721. That law makes no mention of perjury. In fact, Klinger found it took a lighter approach.

"It doesn’t look like it comes with huge penalties," Klinger said.

The reality is that the IRS has yet to release the rule that lays out what will happen if a company tells the government it didn’t lay workers off because of Obamacare when in fact it did. In a press release, the agency said final regulations will be out shortly.

Our ruling

Stirewalt said that under penalty of perjury, companies will need to tell the government that any downsizing they underwent was not due to Obamacare. The reporting part is partly accurate. Employers can lay people off but they can’t do so just to get under the 99-worker mark and get an extra year before they need to offer health insurance.

There seems to be no support for the element that perjury charges await the firm that falsely reports why it downsized. Those rules have yet to be released.

The claim gets a key piece of information wrong. We rate it Half True.